As noted previously, US steel prices have settled at higher levels after rising sharply in the first quarter. However, the rises in US steel producers’ first-quarter earnings weren’t commensurate with the sharp gains in spot steel prices. The disconnect isn’t difficult to explain. There’s a lag between steel companies booking their sales and the steel getting shipped to the buyer.

As noted previously, spot steel prices have risen sharply this year and are currently at their highest level since 2011. Steel companies including AK Steel (AKS), Nucor (NUE), and ArcelorMittal (MT) expect their second-quarter earnings to rise sequentially as higher steel prices flow into their spot sales. U.S. Steel (X) also expects its earnings to rise in the second quarter.

As noted previously, U.S. Steel (X) is trading flat for the year. To be sure, steel market conditions had set the stage for a smart rally in steel stocks. To put things in perspective, US steel prices are currently at their highest level since 2011.

U.S. Steel (X) is having a dismal run this year. The stock is trading roughly flat for the year based on May 21 closing prices. The picture also looks scary for AK Steel (AKS), which has seen a negative price action of 21.2% so far in the year. Nucor (NUE) and Steel Dynamics (STLD) are trading with year-to-date gains of 3.2% and 17.5%, respectively. The SPDR S&P Metals and Mining ETF (XME) has gained 3.5% so far in 2018.

US steel stocks (XME) U.S. Steel Corporation (X) and AK Steel (AKS) are trading sharply higher today. Nucor (NUE) and Steel Dynamics (STLD) are also in the green. We saw a selling spree in US steel stocks yesterday as markets feared that China could also be exempt from the Section 232 steel tariffs.

In this article, we’ll look at the weekly US steel production data released by the AISI (American Iron and Steel Institute). According to AISI data, US steel production rose 1.7% YoY (year-over-year) in the week that ended on May 12.

US stocks are trading higher today following constructive US-China trade talks. Notably, US-China trade friction has been among the key factors driving markets lower this year. While broader market indices including the Dow Jones Industrial Average (DIA) are in the green today, steel stocks are taking a beating. U.S. Steel Corporation (X) and AK Steel (AKS) are down sharply. Nucor (NUE) and Steel Dynamics (STLD) are also trading lower.

Cleveland-Cliffs (CLF) stock has been on a roller coaster ride for most of 2018. While CLF stock has seen a lot of volatility in 2018, it’s making a strong upward move in the second quarter on strong fundamentals.

President Trump extended the temporary Section 232 exemptions until the end of this month. As quoted by CNBC, the statement on the exemptions said, “The Administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. South Korea has managed to get a long-term exemption from the Section 232 tariffs.

AK Steel (AKS) is the only steel company among those under our review to have reported a yearly fall in its 1Q18 steel shipments. In this article, we’ll see what different steel companies have guided for their 2Q18 steel shipments.

During the 4Q17 earnings call, ArcelorMittal (MT) announced its plan to restore the annual dividend program that was suspended in 2015. The company has reinstated its annual dividend at $0.10 per share from this year. Meanwhile, ArcelorMittal intends to pay dividends as a percentage of its free cash flows once its net debt falls below $6 billion. As of March 31, ArcelorMittal had a net debt of $11.1 billion. The company’s net debt rose almost $1 billion from the sequential quarter amid working capital buildup, a share buyback, and the forex impact in the quarter.

On May 9, Steel Dynamics (STLD) received a “strong buy” rating from three analysts, while eight analysts gave the stock a “buy” rating. The remaining four analysts polled by Thomson Reuters on May 9 gave the stock a “hold” rating.

As we noted in the previous part, U.S. Steel Corporation’s (X) forward valuation multiples appear to be on the lower side compared to other steel stocks including AK Steel (AKS). In this part, we’ll look at U.S. Steel Corporation’s growth drivers. We’ll discuss the risks that could help us understand whether there’s more downside for the stock.